PM vows to resolve Indon spy row

PRIME Minister Tony Abbott has pledged to resolve the spying row with Indonesia to the mutual benefit of both nations, and has told the outgoing president that his policy on asylum-seeker boats means they shouldn't be a problem for much longer.

Mr Abbott on Wednesday met President Susilo Bambang Yudhoyono for the first time since the president last year learned Australia had tapped the phones of his wife and other confidants under the previous Labor government.

The president wants to mend severed ties before he leaves office in October, and Mr Abbott is keen to seize the opportunity before a new administration takes over.

Following their brief meeting in Batam, Indonesia, Dr Yudhoyono told reporters he believed the partnership could be stronger in future, with "mutual benefit and mutual respect".

"We have always thought in Indonesia that in time, cooperation between our two great countries can truly be implemented, and even better," the president told reporters.

Foreign ministers Marty Natalegawa and Julie Bishop are expected to complete a code of conduct within weeks, with Mr Abbott confident of a resolution to the "mutual benefit" of both parties.

"Intelligence sharing in dealing with common problems is the way forward for both of us," he said.

On the other thorny issue in the relationship - turning asylum-seeker boats back to Indonesian territory, Mr Abbott said there were now so few boats: "I believe this is an issue which will not substantially further trouble us".

Before they met for dinner, the prime minister praised SBY as the leading statesman of the ASEAN region.

"I believe when the history of Indonesia is written, the Yudhoyono presidency will be a watershed," Mr Abbott said.

"Marked by peace abroad, prosperity at home, the consolidation of democracy and the strengthening of national unity.

"This is a marvellous legacy that you, Bapak President, leave your country and I have to say I have been proud and thrilled and honoured to get to know you over the last few years and I will be very pleased and proud and honoured to call you a friend in the months and years and decades ahead."

Dr Natalegawa has been dampening expectations of a quick fix, pointing out that Australia's "unilateral" approach on asylum seeker boats would continue to be a problem.

He wouldn't comment on Mr Abbott's view following the meeting, but said he was keen to finish the code of conduct because, "addressing one issue will no doubt help the other one".

The reunion has been months coming and the pair were forced to wait a little longer than planned on Wednesday, when a technical problem on Mr Abbott's RAAF jet delayed him by more than two hours.

From Indonesia, he will travel to France, Canada and the US, for talks with President Barack Obama.